Gov. M. Jodi Rell wants to know who took home the AIG bonuses and is going after the company find out.
American International Group, which just collected $170 million in federal bailout money, is using Connecticut state law as an excuse for why it just had to pay out $165 million in bonuses.
So, how did Connecticut get pulled into this mess? AIG’s financial products subsidiary just happens to be located in Wilton.
Now, Rell is throwing state law right back at them. Thursday, the state will subpoena AIG, asking it to hand over info on how much of the federal bailout funds AIG managers received.
An attorney for AIG told Commissioner Jerry Farrell Jr. of the Department of Consumer Protection the company will accept the subpoena Thursday afternoon, Gov. M. Jodi Rell's office said.
The state's demanding contract documents, employee names and titles, job descriptions and other employment information.
Rell told Farrell Wednesday to subpoena the employment contracts AIG has cited to justify the bonuses and the state will decide for itself whether the payments can be voided under the Connecticut Unfair Trade Practices Act.
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“The company cited Connecticut law and they will be held to Connecticut law – all of it,” Rell said. “Commissioner Farrell will use the information obtained by this subpoena to determine whether the AIG bonuses can be voided as ‘against public policy’ under CUTPA.
Rell is not happy about state law being used as an excuse for taxpayer money to fund second manses and other luxuries for people who were already well paid.
The law cited, the Connecticut Unfair Trade Practices Act, came into being in 1973 and was supposed to protect from unfair trade practices.
“The use of bailout funds – which really means taxpayer money – to pay employee bonuses was certainly not the ‘public policy’ Congress had in mind when it enacted the Troubled Asset Relief Program,” Rell said. “Those funds were intended to stabilize our financial markets and restore the flow of credit to consumers. They were not intended to reward the very people responsible for dealing a deathblow to the financial industry. We will use all legal means available to void the bonuses and recapture those taxpayer dollars.”
The subpoena requires AIG to produce the documents by March 27.
